Notice of the 44th Ordinary General Shareholders' Meeting

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Securities Code No. 8848 June 8, 2017

To Our Shareholders

Eisei Miyama President and CEO Leopalace21 Corporation

2-54-11 Honcho, Nakano-ku, Tokyo

Notice of the 44th Ordinary General Shareholders’ Meeting

You are cordially invited to attend the 44th Ordinary General Shareholders’ Meeting of Leopalace21 Corporation (“the Company”). The meeting will be held as described below.

If you are unable to attend the meeting, you may exercise your voting rights by either of the following methods. Please exercise your voting rights no later than 6:00 p.m. on Wednesday, June 28, 2017.

[Exercising your voting rights in writing]

Please refer to pages 3 to 17 of the Reference Materials for the General Shareholders’ Meeting, indicate “for” or “against” for each agenda item shown on the enclosed Voting Rights Exercise Form and return it in time for delivery by the deadline mentioned above.

In the event that no indication of “for” or “against” has been made, this shall be treated as the intent of approval.

[Exercising your voting rights via the Internet, etc.]

Please access the Voting Rights Exercise Site (http://www.evote.jp/), which is designated by the Company. Enter the “Login ID” and “Temporary Password” noted on the enclosed Voting Rights Exercise Form, refer to pages 3 to 17 of the Reference Materials for the General Shareholders’ Meeting or reference materials on the Voting Rights Exercise Site, follow the instructions on the screen, and indicate “for” or “against” for each agenda item.

In addition, if you exercise your voting rights both in writing and via the Internet, the voting via the Internet shall prevail.

English Translation of Original Japanese

This is a translation of the original notice in Japanese. In the event of any discrepancy, the original notice in Japanese shall prevail.

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Details

1. Date and Time: June 29, 2017 (Thursday), 10:00 a.m. (Reception will open at 9:00 a.m.)

2. Place: Leopalace21 Corporation, Head Office,

Event Hall on B1 floor

2-54-11 Honcho, Nakano-ku, Tokyo 3. Agenda for the Meeting

Matters to be reported:

1. Report on the Business Report, Consolidated Financial Statements, and Results of Audit of the Consolidated Financial Statements by the Accounting Auditor and the Audit & Supervisory Board for the 44th Fiscal Term (from April 1, 2016 to March 31, 2017)

2. Report on Non-consolidated Financial Statements for the 44th Fiscal Term (from April 1, 2016 to March 31, 2017)

Matters to be resolved:

Proposal No. 1: Appropriation of Surplus

Proposal No. 2: Amendment to the Articles of Incorporation Proposal No. 3: Appointment of Eleven (11) Directors

Proposal No. 4: Appointment of One (1) Audit & Supervisory Board Member Proposal No. 5: Revision of Remuneration Amount for Directors

Proposal No. 6: Revision of Remuneration Concerning Stock Options as Stock-Based Remuneration to Directors

Note: For those attending the meeting in person, please present the enclosed Voting Rights Exercise Form at the reception desk.

Should any amendments be made to the Reference Materials for the General Shareholders’ Meeting, the Business Report, Non-consolidated Financial Statements or Consolidated Financial Statements, such amendments will be posted on the Company website (please refer to the URL below).

Trust banks and other nominee shareholders (including standing proxies) who have applied in advance to use the electronic voting platform operated by ICJ, Inc. (a joint-venture company established by Tokyo Stock Exchange, Inc. and others) may use this platform other than voting via the Internet to electronically exercise voting rights for the Company’s General Shareholders’ Meeting.

http://eg.leopalace21.com/ir/

On the day of the General Shareholders’ Meeting, officers and staff of the Company will be dressed “cool-biz” style, or in suits without neckties, in order to contribute to electricity savings with respect to air-conditioning. We invite all shareholders to dress casually.

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Reference Materials for the General Shareholders’ Meeting

Proposal No. 1: Appropriation of Surplus

In conjunction with distributing to shareholders the profits created through operating activities in the form of cash dividends, the Company’s basic policy is to invest for future growth in areas such as real estate, overseas businesses, mergers and acquisitions, IT and research and development in order to maximize mid- to long-term corporate value, thus enhancing shareholder value by raising earnings per share (EPS) and providing stable dividends to shareholders.

Based on the above-mentioned policy, in light of such factors as business performance during the fiscal term under review and future business development, it is proposed that the distribution of year-end dividends for the fiscal term under review be as follows.

Matters concerning year-end dividends (1) Form of dividend

Cash

(2) Allotment of dividends assets and total amount of dividends 12 yen per common share of the Company

The total payment of year-end dividends shall amount to 3,154,487,940 yen. (3) Effective date of payment for dividends of surplus

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Proposal No. 2: Amendment to the Articles of Incorporation

1. Rationale for amendment

(1) The Company would like to add new business purposes in the provision of Article 2 (Purpose) of the existing Articles of Incorporation to expand and diversify business.

(2) In line with the above-mentioned amendments, the item numbers of the Article are appropriately adjusted.

2. Details of amendment

Details of the amendment are as follows:

(Proposed amendments are underlined)

Existing Articles of Incorporation Proposed Amendment

Chapter 1 General Provisions Chapter 1 General Provisions

Article 1. <Omitted> Article 1. <As per the existent articles>

(Purpose) (Purpose)

Article 2. 1.–30. <Omitted> Article 2. 1.–30. <As per the existent articles> <Newly established> 31. Education business for human

resource development related to nursing care

<Newly established> 32. Fee-charging employment

placement business

<Newly established> 33. Worker dispatching business 31. Purchase, sales and rental

service of used equipment, such as beds and wheelchairs

34. <As per the existent articles>

32. Dealer in secondhand articles 35. <As per the existent articles>

33. Transportation agency

business

36. <As per the existent articles> 34. Any and all businesses relating

to the foregoing items

37. <As per the existent articles>

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Proposal No. 3: Appointment of Eleven (11) Directors

The term of office of all eleven (11) Directors will expire at the conclusion of this Ordinary General Shareholders’ Meeting. Accordingly, it is proposed that eleven (11) Directors (of which three (3) will be Outside Directors) be appointed.

The candidates for Director are as follows:

Candidate number

Name (Date of birth)

Career summary, and positions and duties in the Company (Significant concurrent positions)

Number of the Company’s shares

held

1

Reappointment

Eisei Miyama (November 13, 1957)

October 1977 Joined Leopalace21 Corporation

137,300 shares April 1990 General Manager of the 3rd Sales Department,

Leopalace21 Corporation

June 1990 Director, Leopalace21 Corporation

January 1996 Executive Director of Management, Leopalace21 Corporation

November 1996 General Manager of the Leasing Business Headquarters, Leopalace21 Corporation

April 2003 Senior Managing Director, Leopalace21 Corporation

April 2008 Deputy General Manager of the Sales Headquarters, Leopalace21 Corporation

General Manager of the Elderly Care Business Headquarters, Leopalace21 Corporation

General Manager of the Hotel Business Headquarters, Leopalace21 Corporation

April 2009 Senior Managing Director and Senior Executive Officer, Leopalace21 Corporation

General Manager of the Management Planning Headquarters, Leopalace21 Corporation

December 2009 Vice President and Representative Director, Leopalace21 Corporation

General Manager of the 1st Sales Department, Leasing Business Division, Leopalace21 Corporation

February 2010 President and CEO, Leopalace21 Corporation (incumbent) General Manager of the Marketing and Sales Headquarters, Leopalace21 Corporation

June 2010 President and CEO, Leopalace21 Corporation (incumbent)

Significant concurrent positions Director, Leopalace Guam Corporation

Reason for nomination as a candidate for Director

Mr. Eisei Miyama is fulfilling an appropriate role as Director by taking important management decisions and supervising business execution. Moreover, as President and CEO, he demonstrates strong leadership and decisiveness based on his abundant experience in guiding the execution of the Company’s business, such as the formulation of the Leopalace21 Group’s

Medium-term Management Plan.

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Candidate number

held

2

Reappointment

Tadahiro Miyama (January 21, 1966)

September 1985 Joined Leopalace21 Corporation

15,100 shares October 2002 General Manager of the Sales and Marketing General

Headquarters, Leopalace21 Corporation

Deputy General Manager of the Sales and Marketing General Headquarters, Leopalace21 Corporation

October 2006 Director and Managing Executive Officer, Leopalace21 Corporation

General Manager of the Subcontracting Business Headquarters, Leopalace21 Corporation

May 2007 Executive Director of Management, Leopalace21 Corporation

April 2009 Executive Director of Management and Managing Executive Officer, Leopalace21 Corporation General Manager of the Sales and Marketing General Headquarters, Leopalace21 Corporation

General Manager of the Subcontracting Business Department, Leopalace21 Corporation

General Manager of the Subcontracting Sales Department, Leopalace21 Corporation

May 2011 Director and Senior Executive Officer, Leopalace21 Corporation

General Manager of the Marketing and Sales Headquarters, Leopalace21 Corporation (incumbent)

General Manager of the Leasing Business Division, Leopalace21 Corporation

April 2012 General Manager of the Apartment Construction Subcontracting Business Division, Leopalace21 Corporation

April 2014 Director and Senior Vice President, Leopalace21 Corporation (incumbent)

General Manager of the Corporate Business Promotion Headquarters, Leopalace21 Corporation (incumbent) July 2015 General Manager of the Apartment Construction

Subcontracting Business Division, Leopalace21 Corporation

April 2016 General Manager of the Leasing Business Division, Leopalace21 Corporation

Significant concurrent positions Director, Leopalace Leasing Corporation Director, Plaza Guarantee CO., LTD. Director, Asuka SSI

Director, Azu Life Care Co., Ltd. Director, Life Living Co., Ltd. Director, Leopalace Guam Corporation

Director, Leopalace21 Business Consulting (Shanghai) Co., Ltd. Director, Leopalace21 (Thailand) CO., LTD.

Director, LEOPALACE21 VIETNAM CO., LTD. Director, Leopalace21 (Cambodia) Co., Ltd. Director, LEOPALACE21 PHILIPPINES INC.

Director, LEOPALACE21 REAL ESTATE (CAMBODIA) Co., Ltd.

Mr. Tadahiro Miyama is fulfilling an appropriate role as Director by taking important management decisions and supervising business execution. Moreover, as Senior Vice President, he is actively involved in business execution, planning the Company’s global strategy and controlling the marketing and sales and other departments.

(7)

Candidate number

held

3

Reappointment

Yuzuru Sekiya (September 1, 1957)

April 1980 Joined The Sumitomo Bank, Limited (now Sumitomo Mitsui Banking Corporation)

12,800 shares April 2004 Manager of Tokyo Credit Business Dept. IV, Sumitomo

Mitsui Banking Corporation

June 2005 General Manager of Kitakyushu Corporate Business Office, Sumitomo Mitsui Banking Corporation

April 2008 Head of Credit Monitoring Dept. of Credit Dept. I, Middle Market Banking Unit, Sumitomo Mitsui Banking Corporation

April 2010 Joined Leopalace21 Corporation on loan Executive Officer, Leopalace21 Corporation

Deputy General Manager of the Management Headquarters, Leopalace21 Corporation

June 2010 Director and Executive Officer, Leopalace21 Corporation May 2011 Deputy General Manager of the Business Management

Headquarters, Leopalace21 Corporation

April 2012 Director and Managing Executive Officer, Leopalace21 Corporation

General Manager of the Business Management Headquarters, Leopalace21 Corporation

April 2013 General Manager of the General Planning Headquarters, Leopalace21 Corporation

Deputy General Manager of the Business Management Headquarters, Leopalace21 Corporation

April 2014 Director and Senior Executive Officer, Leopalace21 Corporation (incumbent)

General Manager of the Management Planning Headquarters, Leopalace21 Corporation (incumbent)

April 2015 General Manager of the Hotel and Resort Business Division, Leopalace21 Corporation

Significant concurrent positions Director, Leopalace Guam Corporation

Mr. Yuzuru Sekiya is fulfilling an appropriate role as Director by taking important management decisions and supervising business execution. Moreover, as Senior Executive Officer, he is actively involved in business execution, controlling the management planning department.

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Candidate number

held

4

Reappointment

Hiroshi Takeda (January 1, 1964)

April 1988 Joined Leopalace21 Corporation

12,100 shares April 1999 General Manager of the Kinki Sales Headquarters,

October 2006 Executive Officer, Leopalace21 Corporation June 2007 Director, Leopalace21 Corporation

General Manager of the West Japan Sales Headquarters, Subcontracting Business Headquarters, Leopalace21 Corporation

April 2009 Director and Executive Officer, Leopalace21 Corporation General Manager of the Sales Planning Department, Subcontracting Business Division, Leopalace21 Corporation

April 2010 Director and Executive Officer, Leopalace21 Corporation General Manager of the Western Japan Construction Subcontracting Department, the Construction Subcontracting Business Division, Leopalace21 Corporation

General Manager of the Central Japan Construction Subcontracting Department, the Construction Subcontracting Business Division, Leopalace21 Corporation

May 2011 General Manager of the Asset Management Department, Leasing Business Division, Leopalace21 Corporation

April 2013 Managing Executive Officer, Leopalace21 Corporation General Manager of the Leasing Business Division, Leopalace21 Corporation

April 2014 Senior Executive Officer, Leopalace21 Corporation

June 2015 Director and Senior Executive Officer, Leopalace21 Corporation (incumbent)

January 2016 Deputy General Manager of the Apartment Construction Subcontracting Business Division, Leopalace21 Corporation

April 2016 General Manager of the Apartment Construction Subcontracting Business Division, Leopalace21 Corporation (incumbent)

Deputy General Manager of the Marketing and Sales Headquarters, Leopalace21 Corporation (incumbent)

Significant concurrent positions

Representative Director, Morizou Co., Ltd. Director, Life Living Co., Ltd.

Mr. Hiroshi Takeda is fulfilling an appropriate role as Director by taking important management decisions and supervising business execution. Moreover, as Senior Executive Officer, he is actively involved in business execution, controlling the leasing business and the construction business.

(9)

Candidate number

held

5

Reappointment

Kazuto Tajiri (August 22, 1952)

April 1975 Joined The Kyowa Bank, Ltd. (now Resona Bank, Limited)

4,500 shares October 1998 General Manager of Credit 4th Department, The Kyowa

Bank, Ltd. (now Resona Bank, Limited)

June 2002 General Manager of Credit 2nd Department, The Asahi Bank, Ltd. (now Resona Bank, Limited)

March 2003 General Manager of Credit 2nd Department, Saitama Resona Bank, Limited

July 2004 Joined Resona Research Institute Co., Ltd. on loan General Manager of Tokyo Consulting Department June 2008 Executive Officer, Head and General Manager of Tokyo

Sales Department, Resona Research Institute Co., Ltd. December 2009 Managing Executive Officer, Head of Tokyo Headquarters,

Tokyo Sales Department, Saitama Sales Department and Consulting Department, Resona Research Institute Co., Ltd.

April 2013 Joined Leopalace21 Corporation

Managing Executive Officer, Leopalace21 Corporation General Manager of the Business Management Headquarters, Leopalace21 Corporation

June 2013 Director and Managing Executive Officer, Leopalace21 Corporation

April 2014 General Manager of the Management Headquarters, Leopalace21 Corporation (incumbent)

April 2016 Director and Senior Executive Officer, Leopalace21 Corporation (incumbent)

Mr. Kazuto Tajiri is fulfilling an appropriate role as Director by taking important management decisions and supervising business execution. Moreover, as Senior Executive Officer, he is actively involved in business execution, controlling the business management department.

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Candidate number

held

6

Reappointment

Yoshikazu Miike (July 8, 1957)

April 1976 Joined Sankei Co., Ltd.

71,700 shares October 1980 Joined Leopalace21 Corporation

April 1999 General Manager of the Sales and Marketing General Headquarters, Leopalace21 Corporation

Deputy General Manager of the Sales and Marketing General Headquarters, Leopalace21 Corporation

October 2003 Deputy General Manager of the Leasing Business Headquarters, Leopalace21 Corporation

October 2006 Director and Managing Executive Officer, Leopalace21 Corporation (incumbent)

Representative in charge of the Kyushu region, West Japan Sales Headquarters, Leasing Business Headquarters, Leopalace21 Corporation

June 2007 Representative in charge of the West Japan regions, Leasing Business Headquarters, Leopalace21 Corporation April 2008 Representative in charge of the East Japan regions, Leasing

Business Headquarters, Leopalace21 Corporation April 2009 General Manager of the Related Business Headquarters,

General Manager of the Elderly Care Business Department, Leopalace21 Corporation

April 2010 General Manager of the Leasing Business Division, Leopalace21 Corporation

General Manager of the Western Japan Leasing and Administration Department, Leasing Business Division, Leopalace21 Corporation

May 2011 General Manager of the Related Businesses Division, Leopalace21 Corporation

February 2012 General Manager of the Hotel and Resort Business Division, Leopalace21 Corporation

April 2012 Deputy General Manager of the Related Businesses Division, Leopalace21 Corporation

April 2013 General Manager of the Hotel and Resort Business Division, Leopalace21 Corporation

April 2015 Deputy General Manager of Hotel and Resort Business Division, Leopalace21 Corporation

Representative Director, WING MATE CO., LTD.

Mr. Yoshikazu Miike is fulfilling an appropriate role as Director by taking important management decisions and supervising business execution. Moreover, as Managing Executive Officer, he is actively involved in business execution, and is responsible for WING MATE CO., LTD., an affiliated company of the Company.

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Candidate number

held

7

Reappointment

Hiroyuki Harada (January 7, 1955)

April 1980 Joined NISSANSHA INC.

10,500 shares January 1985 Joined Leopalace21 Corporation

April 1999 General Manager of the Advertising Department, Leopalace21 Corporation

October 2004 General Manager of the Personnel Department, Leopalace21 Corporation

May 2007 Executive Officer, Leopalace21 Corporation May 2011 General Manager of the General and Legal Affairs

Department, Leopalace21 Corporation April 2012 Executive Officer, Leopalace21 Corporation

General Manager of the Personnel Department, Leopalace21 Corporation

April 2013 Deputy General Manager of the Business Management Headquarters, Leopalace21 Corporation

June 2013 Director and Executive Officer, Leopalace21 Corporation January 2014 General Manager of the Work-life Balance Promotion

Office, Leopalace21 Corporation (incumbent)

April 2014 Deputy General Manager of the Management Headquarters, Leopalace21 Corporation (incumbent)

April 2016 Director and Managing Executive Officer, Leopalace21 Corporation (incumbent)

Representative Director, PLAZA Guarantee CO., LTD.

Mr. Hiroyuki Harada is fulfilling an appropriate role as Director by taking important management decisions and supervising business execution. Moreover, as Managing Executive Officer, he is actively involved in business execution, controlling the personnel, general and legal affairs departments.

For this reason, it is judged that his abundant knowledge and ability in the field of management are essential to the Company’s management, so the Company has nominated him once more as a candidate for Director.

8

Reappointment

Bunya Miyao (April 14, 1960)

April 1983 Joined Nakamichi Leasing Co., Ltd.

4,700 shares June 1990 Joined Leopalace21 Corporation

September 2000 Deputy Manager of the Financial Department, Leopalace21 Corporation

July 2008 General Manager of the Resort Business Headquarters, Leopalace21 Corporation

July 2010 General Manager of the Business Planning Department, Leopalace21 Corporation

July 2012 Administrative Officer, Leopalace21 Corporation

April 2013 Executive Officer, Leopalace21 Corporation

June 2016 Director and Executive Officer, Leopalace21 Corporation (incumbent)

May 2017 Representative in charge of the Business Planning Department, the Public Relations Department, Leopalace21 Corporation (incumbent)

Mr. Bunya Miyao is fulfilling an appropriate role as Director by taking important management decisions and supervising business execution. Moreover, as Executive Officer, he is actively involved in business execution, controlling the business planning and public relations.

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Candidate number

held

9

Reappointment Outside Director Independent Officer

Tadashi Kodama (November 11, 1947)

April 1970 Joined The Dai-Tokyo Fire & Marine Insurance Co., Ltd. (now Aioi Nissay Dowa Insurance Co., Ltd.)

3,000 shares June 2001 Director, Aioi Insurance Co., Ltd. (now Aioi Nissay Dowa

Insurance Co., Ltd.)

April 2002 Managing Director, Aioi Insurance Co., Ltd.

April 2003 Senior Managing Director, Aioi Insurance Co., Ltd.

April 2004 Representative Director, President, Aioi Insurance Co., Ltd.

April 2010 Representative Director, Vice Chairman of the Board of Directors, Aioi Insurance Co., Ltd.

April 2010 Representative Director, Executive Officer, MS&AD Insurance Group Holdings, Inc.

October 2010 Representative Director, Vice Chairman of the Board of Directors, Aioi Nissay Dowa Insurance Co., Ltd.

June 2011 Director, Vice Chairman of the Board of Directors, Aioi Nissay Dowa Insurance Co., Ltd.

June 2012 Senior Advisor, Aioi Nissay Dowa Insurance Co., Ltd.

June 2015 Retired from Aioi Nissay Dowa Insurance Co., Ltd.

June 2016 Director, Leopalace21 Corporation (incumbent)

Reason for nomination as a candidate for Outside Director

Mr. Tadashi Kodama fulfills an appropriate role in supervising the business execution of the Company, using his keen insight accumulated through his career as a senior manager of a listed company and deep knowledge and experience in corporate management to actively provide advice from an independent and fair perspective during the Board of Directors meetings and other meetings. He also serves as a member of the Nomination and Remuneration Committee, thereby increasing the transparency and objectivity of officer appointment and remuneration decision procedures.

For this reason, it is judged that his abundant knowledge and ability in the field of management are essential to the Company’s management, so the Company has nominated him once more as a candidate for Outside Director.

10

Tetsuji Taya (December 14, 1963)

April 1987 Joined The Fuji Bank, Limited (now Mizuho Bank, Ltd.)

3,300 shares April 2007 Board Member & Managing Director, Industrial Growth

Platform, Inc.

September 2009 Representative Director, Industrial Growth Platform, Inc.

June 2010 Director, Leopalace21 Corporation (incumbent) March 2011 Board Member & Managing Director, Industrial Growth

Platform, Inc. (incumbent)

Board Member & Managing Director, Industrial Growth Platform, Inc.

Mr. Tetsuji Taya fulfills an appropriate role in supervising the business execution of the Company, using his keen insight accumulated through his career as a senior manager and deep knowledge and experience in corporate management to actively provide advice from an independent and fair perspective during the Board of Directors meetings and other meetings.He also serves as a member of the Nomination and Remuneration Committee, thereby increasing the transparency and objectivity of officer appointment and remuneration decision procedures.

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Candidate number

held

11

Yoshiko Sasao (April 2, 1960)

April 1984 Joined Recruit Co., Ltd.

1,200 shares April 2000 Joined RECRUIT STAFFING CO., LTD. on loan

April 2004 Joined RECRUIT STAFFING CO., LTD. Manager of Marketing Support 1 Division

April 2006 Joined Tokyo Electric Power Company, Incorporated

November 2007 Joined TEPCO PARTNERS Co, Inc. on loan Managing Director

July 2010 Representative Director, TEPCO PARTNERS Co, Inc. June 2015 Director, Leopalace21 Corporation (incumbent)

June 2015 Representative Director, SHiDAX BEAUTY CARE MANAGEMENT CORPORATION

April 2017 Executive Officer, Hasegawa holdings Co., Ltd. (incumbent)

Representative Director, Hasegawa Social Works Co., Ltd. (incumbent)

Representative Director, Hasegawa Social Works Co., Ltd.

Ms. Yoshiko Sasao fulfills an appropriate role in supervising the business execution of the Company, using her keen insight accumulated through her career as a senior manager and deep knowledge and experience in corporate management to actively provide advice from an independent and fair perspective during the Board of Directors meetings and other meetings. She also serves as a member of the Nomination and Remuneration Committee, thereby increasing the transparency and objectivity of officer appointment and remuneration decision procedures.

For this reason, it is judged that her abundant knowledge and ability in the field of management are essential to the Company’s management, so the Company has nominated her once more as a candidate for Outside Director.

Notes: 1. There is no particular interest between any of the candidates and the Company.

2. Mr. Tadashi Kodama, Mr. Tetsuji Taya and Ms. Yoshiko Sasao are candidates for Outside Director. They are candidates for independent officer as stipulated in Article 436-2 of the Securities Listing Regulations of Tokyo Stock Exchange, Inc. As the candidates also satisfy the independence criteria set forth by the Company, the Company deems that the independence of the candidates is also assured.

3. Mr. Tadashi Kodama has held positions at Aioi Nissay Dowa Insurance Co., Ltd. as Representative Director, Vice Chairman of the Board of Directors, and Senior Advisor. In June 2015 he retired from said company, and in June 2016 he assumed the office of Outside Director of the Company. Although there is a business relationship between said company and the Company, the transaction amount is negligible (accounts for less than 0.1% of said

company’s and the Company’s separate consolidated net sales) and, therefore, does not affect his independence. 4. Mr. Tadashi Kodama is currently an Outside Director of the Company. His term as an Outside Director will be one

year at the conclusion of this General Shareholders’ Meeting.

5. Mr. Tetsuji Taya is currently an Outside Director of the Company. His term as an Outside Director will be seven years at the conclusion of this General Shareholders’ Meeting.

6. Ms. Yoshiko Sasao is currently an Outside Director of the Company. Her term as an Outside Director will be two years at the conclusion of this General Shareholders’ Meeting.

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Proposal No. 4: Appointment of One (1) Audit & Supervisory Board Member

The term of office of Audit & Supervisory Board Member Mr. Mutsuhiro Yamada will expire at the conclusion of this Ordinary General Shareholders’ Meeting. Accordingly, it is therefore proposed that one (1) Audit & Supervisory Board Member be appointed.

The Audit & Supervisory Board has already given consent to this proposal. The candidate for Audit & Supervisory Board Member is as follows:

Career summary and positions in the Company (Significant concurrent positions)

held New Candidate

Outside Audit & Supervisory Board Member

Independent Officer

Jiro Yoshino (August 24, 1954)

April 1978 Joined Dai-Tokyo Fire and Marine Insurance Co., Ltd.

3,000 shares April 1994 General Manager of Shin-Toshin Branch, Tokyo Sales

Department 1, Dai-Tokyo Fire and Marine Insurance Co., Ltd.

April 1999 Manager of Chiba Sales Department 2, Dai-Tokyo Fire and Marine Insurance Co., Ltd.

May 2001 General Manager of Keiyo Branch, Aioi Insurance Co., Ltd.

November 2002 General Manager of Market Development Department, Aioi Insurance Co., Ltd.

October 2004 General Manager of Tokyo Corporate Sales Department, Aioi Insurance Co., Ltd.

July 2006 Administrative Officer, General Manager of Tokyo Corporate Sales Department, Aioi Insurance Co., Ltd.

April 2010 Administrative Officer, General Manager of Chiba Division, Aioi Insurance Co., Ltd.

October 2010 Director, General Manager of Chiba Division, Aioi Nissay Dowa Insurance Co., Ltd.

April 2011 Executive Officer, Aioi Nissay Dowa Insurance Co., Ltd.

April 2012 Managing Executive Officer, Aioi Nissay Dowa Insurance Co., Ltd.

Executive Officer, MS&AD Insurance Group Holdings, Inc.

June 2013 Full-time Audit & Supervisory Board Member, MS&AD Insurance Group Holdings, Inc. (incumbent)

Full-time Audit & Supervisory Board Member, MS&AD Insurance Group Holdings, Inc.

Reason for nomination as a candidate for Outside Audit & Supervisory Board Member

The Company believes that Mr. Jiro Yoshino will appropriately supervise the Company’s management from an objective perspective, using his abundant experience and wealth of expertise accumulated as an executive officer and an audit & supervisory board member of a listed company.

For this reason, the Company has nominated him as a new candidate for Outside Audit & Supervisory Board Member.

Notes: 1. There is no particular interest between the candidate and the Company.

2. Mr. Jiro Yoshino isa candidate for Outside Audit & Supervisory Board Member. He is a candidate for

independent officer as stipulated in Article 436-2 of the Securities Listing Regulations of Tokyo Stock Exchange, Inc. As the candidate also satisfies the independence criteria set forth by the Company, the Company deems that the independence of the candidate is also assured.

3. Although there is a business relationship between MS&AD Insurance Group Holdings, Inc. and the Company, and between Aioi Nissay Dowa Insurance Co., Ltd. and the Company, the transaction amounts are negligible (account for less than 0.1% of said companies’ and the Company’s separate consolidated net sales) and, therefore, do not affect his independence.

4. If Mr. Jiro Yoshino’s appointment as Outside Audit & Supervisory Board Member is approved and he assumes the office of Outside Audit & Supervisory Board Member, in accordance with the provisions of Article 427,

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Proposal No. 5: Revision of Remuneration Amount for Directors

With the objective of facilitating Directors and Executive Officers (hereinafter, “Directors, etc.”) to implement further improvements in the business performance and in corporate value of the Company and the Group, and with the aim of making even clearer the link with business performance and shareholder value, the Company is working on a revision of the remuneration system.

In cases where it is standard to evaluate the work of Directors, etc. excluding Outside Directors, although the new remuneration system is, as a rule, designed to maintain the existing level of remuneration, it widens the range of variation in the value of remuneration for each evaluation based on business performance, and strengthens the link between business performance and corporate value on the one hand and the amount of remuneration on the other.

Also, the remuneration of Directors, etc. excluding Outside Directors previously consisted of basic remuneration, a bonus for a single fiscal year and stock options as stock-based remuneration. In addition to these, however, the Company will establish a Medium-Term Management Plan period bonus linked to the level of achievement versus the Medium-Term Management Plan.

While the basic remuneration is fixed, the bonus for a single fiscal year is aimed at achieving yearly targets, while the Medium-Term Management Plan period bonus is focused on achieving the objectives of the Medium-Term Management Plan, and stock options as stock-based remuneration are intended to raise the motivation to contribute to mid- to long-term business performance and a higher stock price. In this way the Company will have a system that contributes to improved business performance and enhanced corporate value across a diverse range.

By revising the remuneration system in this way, the Company will facilitate the performance of duties that must be carried out by the Directors, etc. of the Company, and aims to enhance shareholder value.

In conjunction with the revision of the remuneration system, it is proposed that the amount of remuneration for Directors be revised as follows.

The amount of remuneration for Directors of the Company has been set at 500 million yen or below per year (excluding the employee salaries for Directors concurrently serving as employees), as approved at the 29th Ordinary General Shareholders’ Meeting held on June 27, 2002, and the amount has remained in place ever since. Taking into consideration, however, changes in the economic situation since then, revision of the remuneration system to one that contributes to improving the Company’s business performance as mentioned above, preparations for an increase in the amounts paid through the remuneration system when business performance is good, and other various circumstances, the Company proposes to revise the amount of remuneration for Directors to 800 million yen or below per year (of which 100 million yen or below for Outside Directors).

The Company requests that the employee salaries for Directors concurrently serving as employees not be included in the amount of remuneration for Directors as before, and that the individual amounts to be paid to each Director be left to the discretion of the Board of Directors.

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Proposal No. 6: Revision of Remuneration Concerning Stock Options as Stock-Based Remuneration to Directors

At the 36th Ordinary General Shareholders’ Meeting held on June 29, 2009, the Company abolished the Retirement Benefit Program for Officers, and introduced stock options as stock-based remuneration with aims of motivating Directors (excluding Outside Directors) and raising their morale to improve corporate performance by sharing merits and risks of changes in stock prices with shareholders.

With regard to the stock options as stock-based remuneration, on the condition that Proposal No. 5 is approved as originally proposed, and following the revisions to the remuneration system etc. as described in Proposal No. 5, the Company proposes revisions as follows.

The amount of remuneration in stock options as stock-based remuneration for Directors (excluding Outside Directors) of the Company has been set at 150 million yen or below per year separately from the amount of remuneration for Directors (500 million yen or below per year; excluding the employee salaries), as approved at the 36th Ordinary General Shareholders’ Meeting held on June 29, 2009, and the amount has remained in place ever since. Taking into consideration, however, changes in the economic situation since then, revision of the remuneration system to one that contributes to improving the Company’s business performance as stated in the Proposal No. 5, preparations for an increase in amounts paid through the remuneration system when business performance is good, and other factors, the Company proposes to revise the amount of remuneration in stock options as stock-based remuneration for Directors (excluding Outside Directors) to 300 million yen or below per year.

The Company requests that the employee salaries for Directors concurrently serving as employees not be included in the amount of remuneration in stock options for Directors (excluding Outside Directors) as before, and that the individual amounts to be paid to each Director be left to the discretion of the Board of Directors.

If Proposal No. 3 “Appointment of Eleven (11) Directors” is approved and adopted as originally proposed, the number of Directors eligible to receive remuneration concerning stock options (excluding three (3) Outside Directors) will be eight (8) after the conclusion of this Ordinary General Shareholders’ Meeting. In this stock options as stock-based remuneration, Directors allotted stock acquisition rights will be granted remunerations equivalent to the amount to be paid in, and be able to acquire the stock acquisition rights by setting off the obligations to pay in for the stock acquisition rights against the remuneration claims. The amount of remuneration as stock options will be calculated by multiplying the fair value of each stock acquisition right determined on the allotment date of stock acquisition rights by the total number of stock acquisition rights to be allotted.

Details of stock acquisition rights are as follows.

(1) Type and number of shares to be issued or transferred upon exercise of stock acquisition rights The maximum number of shares to be issued upon exercise of stock acquisition rights issued on any date within one year from the Company’s General Shareholders’ Meeting with respect to each fiscal year is 500,000 shares of common stock of the Company.

If stock split or stock consolidation is performed by the Company, the number of shares to be issued or transferred shall be adjusted according to the following formula. However, said adjustment shall be made only with respect to the number of shares to be issued or transferred for which stock acquisition rights have not yet been exercised at that point in time, and any fractional shares arising as a result of the adjustment shall be rounded off.

(17)

Furthermore, in the event that the number of shares needs to be adjusted after the date of resolution of this proposal, it may be adjusted by the Company within reasonable bounds as required.

(2) Total number of stock acquisition rights

The maximum number of stock acquisition rights to be issued on any date within one year from the Company’s General Shareholders’ Meeting with respect to each fiscal year is 5,000 units. The number of shares to be issued or transferred per stock acquisition right (hereinafter the “number of shares granted”) is 100 shares (However, in a case where the number of shares is adjusted as stated in (1), the number of shares granted shall be also adjusted in the same manner).

(3) Amount to be paid for stock acquisition rights and its calculation method

The amount to be paid for stock acquisition rights will be calculated by multiplying the fair value of each stock acquisition right determined based on the Black-Scholes model, etc. on the allotment date of stock acquisition rights by the total number of stock acquisition rights to be allotted. Monetary remuneration equivalent to the total amount to be paid for stock acquisition rights will be paid to Directors, and the amount to be paid for stock acquisition rights will be set off against the remuneration claims.

(4) Price of assets invested upon exercise of stock acquisition rights

The price of assets invested upon exercise of each stock acquisition right shall be obtained by multiplying 1 yen which is the amount to be paid per share to be issued upon exercise of stock acquisition rights by the number of shares granted.

(5) Exercise period of stock acquisition rights

Within 30 years from the date following the allotment date of stock acquisition rights. (6) Restrictions on acquisition of stock acquisition rights by transfer

Acquisition of stock acquisition rights by transfer shall require the approval of the Board of Directors.

(7) Terms and conditions for exercise of stock acquisition rights

Stock acquisition rights, in principle, can be exercised from the date following the date in which the right holders lost a position as Director of the Company. Other terms and conditions for exercise of stock acquisition rights shall be determined at the meeting of the Board of Directors in which terms of offering stock acquisition rights, etc. are decided.

(8) Other details of stock acquisition rights

(18)

[Reference]

Independence Criteria for the Company’s Outside Officers (Directors and Audit & Supervisory Board Members)

When nominating Outside Directors or Outside Audit & Supervisory Board Members of the Company, in order for a nominee to be recognized as independent, the nominee must not fall under any of the criteria set forth below.

(1) Person who executes business* of the Leopalace21 Group (*person who executes business of a corporation or other organization such as director (excluding outside director), corporate executive (shikkoyaku), executive officer, business-executing employee, administrative officer, or other officers or employees)

(2) Major shareholder* of the Company (*shareholder who directly or indirectly holds 10% or more of the total voting rights) or a person who executes business thereof

(3) Person who executes business of a corporation of which the Company is a major investor* (*entity who directly or indirectly holds 10% or more of the total voting rights)

(4) Person for whom the Company is a major transaction counterparty* (*a transaction counterparty who provides the Company with goods or services and whose total amount of transactions to the Company in the most recent fiscal year is at least 2% of the total amount of that party’s net sales or gross income) or a person who executes business thereof

(5) Major transaction counterparty of the Company* (*a transaction counterparty to whom the Company provides goods or services and whose total amount of transactions with the Company in the most recent fiscal year is at least 2% of the total amount of the Company’s net sales) or a person who executes business thereof

(6) Person who executes business of a major financing institution of the Company* (*financing institution from which the Company makes borrowings of an amount in the most recent fiscal year of at least 2% of the total assets of the Company)

(7) Person who belongs to the audit firm that performs the statutory auditing of the Company

(8) Accounting specialist such as a certified public accountant, tax specialist such as a certified tax accountant, legal specialist such as an attorney at law or other consultant (hereinafter, collectively, “consultant, etc.”) that receives remuneration other than officer remuneration from the Company of an amount in the most recent fiscal year that is at least 10 million yen or 2% of the total net sales or gross income for that person, whichever is higher, or a person who belongs to such entity in the cases where the consultant, etc. is an entity such as a corporation or partnership

(9) Person who executes business at a company at which a person who executes business of the Company presently serves or within the past three years had served as an outside officer

(10) In the case of a person/entity who has received a donation from the Company in the most recent fiscal year that is at least 10 million yen or 2% of the total net sales or gross income for that person/entity, whichever is higher, that person or a person who executes business thereof

(11) Person who fell under any of the above criteria (1) to (10) within the past three years

(12) Person who is a relative within the second degree of kinship of or who shares living expenses with a person who falls under any of the above criteria (1) to (10) (provided, however, that such “person who executes business” is limited to persons who execute important business, such as directors (excluding outside directors), corporate executives (shikkoyaku), executive officers, business-executing employees, administrative officers and chief division officers for the above criteria (2) to (6), (9) and (10) and such “person who belongs” to an entity is limited to a person possessing the specialist qualifications, such as a certified public accountant or attorney at law for the above criteria (7) and (8))

(19)

(Attachments)

BUSINESS REPORT

(from April 1, 2016 to March 31, 2017)

Items Regarding Status of Group Operations

Overview of Operations

During the fiscal year under review, the domestic economy showed gradual recovery supported

by improvements in corporate earnings, employment, and personal income.

In the rental housing industry, new housing starts of leased units has increased for two

consecutive years (up 11.4% year on year), mainly due to the prolonged low interest rate

environment and strong demand for apartment construction as a strategy to reduce inheritance

taxes. On the other hand, as the number of vacant rental housing units continues to increase in

Japan and recovery in nationwide demand is difficult to foresee, achieving stable occupancy

rates requires mainly constructing apartments in areas where occupancy rates are forecasted to

remain high in the future, while at the same time following a strategy of differentiation by

providing value added services.

Amid this condition, the Leopalace21 Group (the “Group”) aims to achieve the targets of the

Medium-term Management Plan “EXPANDING VALUE,” by building a solid management

structure focusing on core businesses, comprising the leasing business and the construction

business. In addition, the Group aimed to challenge itself with new businesses fields that

contribute to the Group’s future growth, and it worked to expand its business activity areas.

As a result, consolidated net sales for the fiscal year under review came to 520,488 million yen

(up 1.8% year on year). Consolidated operating profit was 22,898 million yen (up 8.6% year on

year), consolidated recurring profit was 22,355 million yen (up 12.3% year on year) and

consolidated net income attributable to shareholders of the parent was 20,401 million yen (up

3.9% year on year).

On a non-consolidated basis, net sales were 499,218 million yen (up 0.8% year on year), operating

profit was 21,704 million yen (up 6.2% year on year), recurring profit was 21,717 million yen (up

9.5% year on year), and net income was 20,486 million yen (up 5.5% year on year).

Leasing Business

In the Leasing Business, to establish stable occupancy, the Group provided abundant added value

with services such as “my DIY” which enables tenants to freely arrange their rooms, “LEONET”

which provides tenants with a broad range of features to enhance internet experience, and

security services in collaboration with large security companies as well as providing initiatives

for corporate customers’ employee accommodation and enhancing the support structure for

foreign tenants. In addition, in the ASEAN region the Group is conducting the development and

operation of serviced apartments and offices.

The occupancy rate at the end of the fiscal year under review was 91.66% (up 1.13 points from

the end of the previous fiscal year), and the average occupancy rate for the period was 88.53%

(up 0.58 points year on year).

The number of units under management at the end of the fiscal year under review was 568,000

(an increase of 6,000 from the end of the previous fiscal year), and the number of direct offices

was 189 (no change from the end of the previous fiscal year). The number of franchise offices

was 119 (a decrease of 11 from the end of the previous fiscal year).

As a result of the above, net sales amounted to 416,594 million yen (up 1.4% year on year), and

operating profit was 22,459 million yen (down 1.7% year on year).

Construction Business

(20)

metropolitan areas of continually increasing population that are expected to have high occupancy

rates in the future, as well as strategically investing in products that are high quality and cutting

edge. In addition, the Group launched a new brand, attempting to strengthen product

competitiveness and refresh its image among tenants, expanded construction variations to realize

“ideal land use,” and begun reconsidering suppliers and its product prices to improve

profitability.

Also, subsidiary Morizou Co., Ltd., provides custom-built homes made with the best Kiso

cypress.

Orders received during the fiscal year under review were 87,139 million yen (up 0.8% year on

year) and the orders received outstanding at the end of the fiscal year under review stood at

67,257 million yen (up 1.4% from the end of the previous fiscal year).

As a result, net sales came to 74,566 million yen (up 0.5% year on year), and operating profit

was 5,051 million yen (up 51.2% year on year).

Elderly Care Business

Net sales were 11,536 million yen (up 6.8% year on year), and operating loss was 1,650 million

yen (a deterioration of 296 million yen from the previous fiscal year).

Hotels & Resort Business

Net sales of resort facilities in Guam and hotels in Japan were 7,244 million yen (down 36.6%

year on year), and operating loss was 768 million yen (a deterioration of 70 million yen from the

previous fiscal year). Westin Resort Guam was sold in April 2016.

Other Businesses

In other businesses such as the real estate business, solar power generation business, and the

small-amount, short-term insurance business, net sales were 10,546 million yen (up 135.1% year

on year), and operating profit was 1,432 million yen (up 324.6% year on year).

Issues to Be Addressed

The Group has started its new “Creative Evolution 2020” Medium-Term Management Plan,

which runs for three years from fiscal 2017. Taking as its basic policy “Sustainable growth in

core businesses to further enhance corporate value and building the foundation for growth

areas,” the Group aims to create corporate value as well as new social value by executing each of

the following strategies.

Business Strategies (Cash flow generation for value creation)

· Core businesses ... Balance apartment supply and management & operation, deploy

with more concentration and more diversification

· Growth businesses: ... Focus on the Elderly Care Business and International Business,

which are less exposed to the aging, shrinking domestic

population, achieve profitability

(21)

customers through by corporate sales specialized for each industry, and by unifying the point of

contact for contracts. Further, in order to capture the growth in the ASEAN region caused by the

expansion of businesses from Japan, with its falling population, the Group is expanding the

development and operation of serviced apartments and offices in the ASEAN region.

In the Development business (Construction and Real Estate Development business), as well as

offering high-quality, high value-added products and services restricted to major cities where

demand is high, in light of the number of taxable persons increasing significantly due to

revisions to the Inheritance Tax Act, the Group will focus on diversifying construction so as to be

able to respond to a range of needs.

In Elderly Care business, which has been designated a growth strategy business, the Group will

strive to improve profitability by rightsizing the personnel structure, and the Group will establish

care facilities in response to the ageing of society.

Financial Strategies (Value creation via balance sheet management)

· Introduction of ROIC management ... Shift away from profit and loss-centric management

to balance sheet management, with the aim of

creating value and optimizing capital structure

* ROIC (Return on Invested Capital) = After-tax operating profit / (interest-bearing debt + net assets)

· Review assets held ... Make active use of operating cash flow, and of cash

flow from selling inefficient assets, for investments

in future growth and for shareholder returns

· Enriched shareholder returns ... By introducing the total return ratio target, the Group

will seek to deliver shareholder returns that include

share buybacks

The Group is currently pressing ahead with new measures aimed at achieving plan targets. We

ask shareholders for your continued understanding and support of these endeavors.

Capital Investment

The total amount of capital investment carried out by the Group in the fiscal year under review is

5,278 million yen.

The main components of this were 749 million yen for investment in rental properties in

connection with the leasing business in Japan, 251 million yen for investment in serviced

apartments and offices in connection with the leasing business in ASEAN countries, 1,693

million yen for capital investment in connection with the hotels & resort business, and 873

million yen for construction of an information system in connection with all businesses.

Financing Activities

Nothing noteworthy to report.

Major Subsidiaries

(as of March 31, 2017)

Company Name Capital

Voting Rights Ratio

Primary Areas of Business

Leopalace Leasing Corporation 400 million yen 100.0% Corporate Housing Management /Real Estate Brokerage Business Plaza Guarantee CO., LTD. 50 million yen 100.0% Rent Obligation Guarantee

(22)

Company Name Capital

Voting Rights Ratio

Primary Areas of Business

Leopalace21 Business Consulting (Shanghai) Co., Ltd.

5,359 thousand

RMB 100.0% Consulting Business LEOPALACE21 VIETNAM CO.,

LTD.

20,196 million

VND 100.0%

Real Estate Agency Business Serviced Apartments Business Leopalace21 (Thailand) CO., LTD. 10,000 thousand

THB

49.0% [51.0%]

Real Estate Agency Business Serviced Apartments Business Leopalace21 (Cambodia) Co., Ltd. 500 thousand

USD 100.0%

Real Estate Agency Business Serviced Apartments Business LEOPALACE21 REAL ESTATE

(CAMBODIA) Co., Ltd. 5 thousand USD

49.0% (49.0%) [51.0%]

Real Estate Business

LEOPALACE21 PHILIPPINES INC. 22,070 thousand

Philippine peso 100.0%

Real Estate Agency Business Serviced Offices Business PT. Leopalace21 Properti Manajemen 2,600,000

thousand IDR

0.0%

[100.0%] Real Estate Agency Business PT. Leopalace Duasatu Realty 7,161,000

thousand IDR 100.0% Real Estate Business Leopalace21 Singapore Pte. Ltd. 450 thousand

USD 100.0% Investment Consulting Business Morizou Co., Ltd. 85 million yen 88.2% Construction Business of

Custom-Built Detached Houses Azu Life Care Co., Ltd. 80 million yen 100.0% Care Business

Leopalace Guam Corporation 26,000 thousand

USD 100.0% Hotels & Resort Business WING MATE CO., LTD. 40 million yen 100.0% Travel Business

Life Living Co., Ltd. 100 million yen 100.0% Real Estate Business

Leopalace Power Corporation 80 million yen 100.0% Solar Power Generation Business Leopalace Energy Corporation 20 million yen 100.0%

(100.0%) Electricity Retail Business

Asuka SSI 1,000 million yen 100.0% Small-Amount, Short-Term

Insurance Business Leopalace Smile Co., Ltd. 10 million yen 100.0% Clerical Work Outsourcing

Service Business

Notes: 1. Leopalace21 Singapore Pte. Ltd. was newly established in the fiscal year under review. Additionally, the Company purchased whole shares of Life Living Co., Ltd., making it into a consolidated subsidiary in the fiscal year under review. Leopalace21 (Shanghai) Property Management Co., Ltd. has been excluded from major subsidiaries as a result of completion of liquidation during the fiscal year under review.

2. There was no specified wholly-owned subsidiary as of the end of the fiscal year under review. 3. Figures in parenthesis in the voting rights ratio column indicate indirect ownership ratios, and these are

included in the total.

4. Figures in square brackets in the voting rights ratio column indicate ownership ratios of a party with a close relationship and a party that gives consent, and these are not included in the total.

Major Areas of Operation

(as of March 31, 2017)

Segment Areas

of

Activity

Leasing Business

Leasing and management of apartments, etc., various leasing-related

services, broadband service, repair work, corporate housing

management business, real estate brokerage business, rent obligation

guarantee business, consulting business, etc.

Construction Business

Contracted construction work for apartments, etc., contracted

construction for custom-built detached houses, etc.

(23)

Segment Areas

of

Activity

Hotels

& Resort Business

Operation of hotel and resort facilities

Other Businesses

Real estate business, solar power generation, small-amount, short-term

insurance, financing activities, clerical work outsourcing service

business, etc.

Major Business Locations of the Group

(as of March 31, 2017)

The Company

Head Office

Nakano-ku, Tokyo

Regional

Headquarters

47 prefectures nationwide

(Leopalace centers: 182 branches; construction sales: 60 branches)

Overseas

(Leopalace centers: 7 branches [People’s Republic of China: 4 branches;

the Republic of Korea: 2 branches; Taiwan: 1 branch])

Hotels

4 facilities nationwide

(Sapporo, Sendai, Nagoya, Hakata)

Care Facilities

62 facilities nationwide

(Tokyo: 4 facilities; Chiba Prefecture: 16 facilities; Saitama Prefecture: 22

facilities; Kanagawa Prefecture: 3 facilities; Ibaraki Prefecture: 8 facilities;

Tochigi Prefecture: 7 facilities; Gunma Prefecture: 2 facilities)

Major Subsidiaries

Leopalace Leasing Corporation Nakano-ku, Tokyo

Plaza Guarantee CO., LTD. Nakano-ku, Tokyo

Leopalace21 Business Consulting (Shanghai) Co., Ltd. The People’s Republic of China LEOPALACE21 VIETNAM CO., LTD. The Socialist Republic of Vietnam Leopalace21 (Thailand) CO., LTD. The Kingdom of Thailand Leopalace21 (Cambodia) Co., Ltd. The Kingdom of Cambodia LEOPALACE21 REAL ESTATE (CAMBODIA) Co., Ltd. The Kingdom of Cambodia LEOPALACE21 PHILIPPINES INC. The Republic of the Philippines PT. Leopalace21 Properti Manajemen The Republic of Indonesia PT. Leopalace Duasatu Realty The Republic of Indonesia Leopalace21 Singapore Pte. Ltd. The Republic of Singapore

Morizou Co., Ltd. Shibuya-ku, Tokyo

Azu Life Care Co., Ltd. Nakano-ku, Tokyo

Leopalace Guam Corporation Guam (a trust territory under the U.S.A.)

WING MATE CO., LTD. Nakano-ku, Tokyo

Life Living Co., Ltd. Shibuya-ku, Tokyo

Leopalace Power Corporation Nakano-ku, Tokyo

Leopalace Energy Corporation Nakano-ku, Tokyo

Asuka SSI Nakano-ku, Tokyo

(24)

Employees of the Group

(as of March 31, 2017)

1. Employees of the Group

Segment

Number of Employees

Leasing Business

3,526

[578]

Construction Business

1,792

[38]

Elderly Care Business

1,209

[1,571]

Hotels & Resort Business

690 [122]

Other Businesses

99 [1]

All companies (common)

379 [11]

Total 7,695

[2,321]

Notes: 1. The number of employees represents a number of employees at work, and for the number of temporary employees (casual workers and contract workers), the average annual number is indicated separately in square brackets.

2. The number of employees indicated as all companies (common) is the number belonging to general administrative departments.

2. Employees of the Company

Number of

Employees

Change Since

Previous FY

Average Age

Average Years

of Service

6,542 [2,050]

+129

36 years and

3 months

8 years and

3 months

Note: The number of employees represents a number of employees at work, and for the number of

temporary employees (casual workers and contract workers), the average annual number is indicated separately in square brackets.

Major Lenders

(as of March 31, 2017)

Lender

Loan Balance

at End of the Fiscal Year under Review

(millions of yen)

Mizuho Bank, Ltd.

9,439

(25)

Items Regarding Shares of the Company

● Number of shares authorized

500,000,000

shares

● Number of shares outstanding

267,443,915

shares

● Number of shareholders

64,976

● Major shareholders (top 10 shareholders)

Shareholder Name

Number of

Shares Held

(thousands of

shares)

Percentage of

Outstanding

Shares

(%)

Japan Trustee Services Bank, Ltd. (Trust Account)

40,952

15.57 BNYML - NON TREATY ACCOUNT

12,002

4.56 The Master Trust Bank of Japan, Ltd. (Trust Account)

10,788

4.10 STATE STREET BANK AND TRUST COMPANY

505225

6,063 2.30

Stockholding Association for Leopalace21’s Business

Connection

5,682 2.16

Trust & Custody Services Bank, Ltd.

4,920

1.87 TAIYO HANEI FUND, L. P.

CEO & FOUNDING PARTNER BRIAN KHEYWOOD

4,876 1.85

BBH for Fidelity Low-Priced Stock Fund (Principal All

Sector Subportfolio)

4,562 1.73

STATE STREET BANK AND TRUST COMPANY

505019

4,504 1.71

BBH FOR FIDELITY SMALL CAP STOCK

FUND

4,169 1.58

Notes: 1. Although the Company holds 4,569 thousand shares of treasury stock, the Company is excluded from the above major shareholders.

2. Of the shares listed above, those held in trust accounts as part of trust bank operations are as follows:

Japan Trustee Services Bank, Ltd. (Trust Account) 40,050 thousand shares The Master Trust Bank of Japan, Ltd. (Trust Account) 10,470 thousand shares Trust & Custody Services Bank, Ltd. 4,920 thousand shares

3. The above shareholding ratios are calculated excluding treasury stock.

● Shareholder

composition

Financial instruments business operations

1.90%

(5,087 thousand shares)

Financial institutions

23.58%

(63,047 thousand shares)

Foreign corporations

49.71%

(132,955 thousand shares)

Treasury stocks

1.71%

(4,569 thousand shares)

Individuals and other

20.46%

(54,718 thousand shares)

(26)

Share Subscription Rights and Others

1. Share subscription rights delivered as consideration for execution of duties and held by

officers of the Company as of the final day of the fiscal year under review

1st series share

subscription rights

2nd series share

subscription rights

Issuance resolution date

June 29, 2009

July 28, 2016

Amount to be paid in for share

subscription rights

Payment not required

Value of property to be contributed upon

exercise of share subscription rights

82,600 yen per 1

share subscription

right

(826 yen per share)

100 yen per 1

share subscription

right

(1 yen per share)

Issue price of shares and amount

incorporated into capital in case of

issuance due to exercise of share

subscription rights

Issue price: 1,103 yen;

amount incorporated

into capital: 552 yen

Issue price: 548 yen;

amount incorporated

into capital: 274 yen

Exercise period

From August 18, 2011

through June 27, 2019

From August 19, 2016

through August 18,

2046

Status of

officers’

holdings

Directors

(excluding

Outside

Directors)

Number of

share

subscription

rights

40 units

1,416 units

Number of

underlying shares

4,000 shares of

common stock

141,600 shares of

common stock

Number of holders

2 persons

8 persons

Audit &

Supervisory

Board

Members

Number of

share

subscription

rights

40 units

–

Number of

underlying shares

4,000 shares of

common stock

–

Number of holders

2 persons

–

Note: The above 1st series share subscription rights are those granted to Directors and Audit & Supervisory Board Members while they were serving at the Company as employees.